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CA Inter Total Absorption Costing — practice questions

Explore 50 free Total Absorption Costing questions in CA Inter Cost and Management Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Total Absorption Costing questions and exercises with answers

Showing questions 1–30 of 50.

Giving each job passing through a production department its share of overhead is called what?Read the answer and worked solution →Overheads are shared on the basis of measurable benefit each department receives. Which basis is this?Read the answer and worked solution →A supervisor earns Rs 50,000 and gives 60% of time to Dept X, 40% to Dept Y. Dept Y share?Read the answer and worked solution →Which factor does the ability to pay basis of apportionment depend on?Read the answer and worked solution →Which apportionment basis may not be fair, since some departments take most of the burden?Read the answer and worked solution →What does secondary apportionment do with service overheads?Read the answer and worked solution →Why are service overheads moved to production departments?Read the answer and worked solution →Which costs does total absorption costing include in the unit product cost?Read the answer and worked solution →Which kind of cost can be easily identified with individual cost centers?Read the answer and worked solution →Which of these is a method of absorbing overheads?Read the answer and worked solution →Production overhead is Rs 3,000 and material cost Rs 10,000. Material cost percentage rate?Read the answer and worked solution →Material cost is Rs 1,000 and overhead is absorbed at 30% of material. Total of both?Read the answer and worked solution →When does the material cost percentage rate become unusable?Read the answer and worked solution →Labour cost is Rs 5,000 and overhead Rs 1,000. What is the labour cost percentage rate?Read the answer and worked solution →A job has labour cost of Rs 500 and the labour cost rate is 20%. Overhead absorbed?Read the answer and worked solution →The labour cost percentage rate can be used in which kind of industry?Read the answer and worked solution →What does the labour cost percentage rate need for proper results?Read the answer and worked solution →Direct material Rs 6,000, direct labour Rs 4,000, overhead Rs 5,000. Prime cost percentage rate?Read the answer and worked solution →Overhead of Rs 250 over 1,000 labour hours. Overhead for a 20-hour job?Read the answer and worked solution →The machine hour rate suits which kind of industry?Read the answer and worked solution →Overhead is Rs 90,000 for 1,200 machine hours. Machine hour rate per hour?Read the answer and worked solution →When is the machine hour rate especially useful?Read the answer and worked solution →Which method is often thought more suitable than traditional absorption costing for services?Read the answer and worked solution →What does absorption costing add into the cost of a unit of product or service?Read the answer and worked solution →The ICMA London view of absorption costing charges which costs to cost units?Read the answer and worked solution →Which expenditure cannot be conveniently traced to any particular revenue unit?Read the answer and worked solution →Which of these is not an overhead expense?Read the answer and worked solution →What do charities often call their administrative overheads?Read the answer and worked solution →Property taxes on production factories are classed as which cost?Read the answer and worked solution →How do property taxes on a factory vary with sales or profit?Read the answer and worked solution →

Worked practice questions

Giving each job passing through a production department its share of overhead is called what?

  1. Apportionment
  2. Allocation
  3. Absorption
  4. Reapportionment
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Correct answer: C. Absorption

Charging each job or unit with its share of overhead as it moves through production is absorption.

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Overheads are shared on the basis of measurable benefit each department receives. Which basis is this?

  1. Ability to pay basis
  2. Time spent survey
  3. Floor area basis
  4. Service or use basis
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Correct answer: D. Service or use basis

When the benefit each department gets can be measured, apportionment follows the service or use basis.

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A supervisor earns Rs 50,000 and gives 60% of time to Dept X, 40% to Dept Y. Dept Y share?

  1. Rs 30,000
  2. Rs 20,000
  3. Rs 25,000
  4. Rs 40,000
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Correct answer: B. Rs 20,000

Dept Y bears 40% of 50,000, which is 20,000.

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More Cost and Management Accounting topics

Cost SheetProcess CostingCost AccountingMarginal CostingEmployee CostInventory ValuationActivity Based CostingBudgets and Budgetary Control